Supply Chain of Iron Ore
SUPPLY CHAIN OF IRON ORE
With the increasing demand in iron ore due to rapid industrialisation and increase in demand of steel, the need for a proper distribution network or a supply chain has been realised. The following section takes into account the supply chain system of iron ore with some examples quoted from the Australia-China supply chain, which is one of the most important supply chains due to Australia being the largest exporter and China being the largest importer of iron ore.
Logistic System:
The iron ore logistic chain is comparatively simpler as compared to some other commodities. Ore is transferred directly from the mine site to the steel plant refinery through various transportation sources like rail, sea or road and conveyors.
The transport of iron ore forms 15-45% of the total cost of the exported ore and more than 60% of the cost of domestic consumption of coal. Iron ore’s high density and large volumes make the transportation and handling more expensive and time consuming. Hence, the efficiency of the total supply chain of iron ore is very important for the overall profitability of a mining operation.
The basic supply chain of iron ore can be depicted as follows:
Fig. 1 International supply chain for iron ore
Fig. 2 Domestic/inland supply chain for iron ore
1. Mine Site: A mine site is an area from where the iron ore is mined in it’s most basic and natural form and is not ready to be used in the steel industry or refinery. The ore is extracted from open cut mines using drilling and blasting techniques. There are three main types of iron ore deposits. a) Magmatic Magnetite ore deposits: It is the most magnetic of all the elements present on the earth surface. Some iron ore deposits in Chile, formed from volcanic flows are known to have magnetite ore deposits in them. Metamorphic accumulations of the ore at Tasmania also are a rich source of magnetite form of iron ore. b) Hematite ore: This ore is found on every
With the increasing demand in iron ore due to rapid industrialisation and increase in demand of steel, the need for a proper distribution network or a supply chain has been realised. The following section takes into account the supply chain system of iron ore with some examples quoted from the Australia-China supply chain, which is one of the most important supply chains due to Australia being the largest exporter and China being the largest importer of iron ore.
Logistic System:
The iron ore logistic chain is comparatively simpler as compared to some other commodities. Ore is transferred directly from the mine site to the steel plant refinery through various transportation sources like rail, sea or road and conveyors.
The transport of iron ore forms 15-45% of the total cost of the exported ore and more than 60% of the cost of domestic consumption of coal. Iron ore’s high density and large volumes make the transportation and handling more expensive and time consuming. Hence, the efficiency of the total supply chain of iron ore is very important for the overall profitability of a mining operation.
The basic supply chain of iron ore can be depicted as follows:
Fig. 1 International supply chain for iron ore
Fig. 2 Domestic/inland supply chain for iron ore
1. Mine Site: A mine site is an area from where the iron ore is mined in it’s most basic and natural form and is not ready to be used in the steel industry or refinery. The ore is extracted from open cut mines using drilling and blasting techniques. There are three main types of iron ore deposits. a) Magmatic Magnetite ore deposits: It is the most magnetic of all the elements present on the earth surface. Some iron ore deposits in Chile, formed from volcanic flows are known to have magnetite ore deposits in them. Metamorphic accumulations of the ore at Tasmania also are a rich source of magnetite form of iron ore. b) Hematite ore: This ore is found on every